Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.
What: Shares in Renishaw (LSE: RSW) climbed more than 16% in early trade this morning, following final results from the British engineering company.
So what: Management hailed a record year for revenue, which came in at £355.5m — a 2% rise on the previous year’s figure of £346.9m, boosted by a record-breaking final quarter that brought in £107m.
Statutory pre-tax profit soared by 17% to £96.4m (2013: £82.1m), leading to basic earnings per share (EPS) flying up a hefty 27% to 118.4p. Management also raised the dividend by 3% to 41.2p per share, to please shareholders.
However, the current strong pound against this time last year caused the adjusted figures to waver, meaning that adjusted pre-tax profit was actually down 11% against FY2013, and adjusted EPS down 7%.
Now what: Still, these are strong figures; Chairman and CEO Sir David R McMurtry nodded towards the “large, unpredictable revenue… from certain Far East customers”, which brought in 11% underlying revenue growth at actual exchange rates, only narrowly behind the recovering UK’s 15% (the Americas and Europe saw underlying growth by these measures of 8% and 4%, respectively).
What we, as investors, can take away from this is that a company like Renishaw, with vast exposure to the UK — mooted to be the fastest growing major economy this year, according to the IMF — and the emerging market of China, has the potential to outpace the market substantially.
